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Stockholders' Equity | 9 Months Ended
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Dec. 31, 2014
Stockholders' Equity Note [Abstract] |
Stockholders' Deficit | 9. Stockholders’ Equity Common Stock Placement On March 28, 2014, the Company entered into an equity and debt investment for up to $12.0 million with NNA. As part of the investment, the Company entered into the Investment Agreement with NNA, pursuant to which the Company sold NNA 2,000,000 shares of the Company’s common stock (the “Purchased Shares”) at a purchase price of $1.00 per share. In addition with the issuance of common shares, the Company issued to NNA 1,000,000 warrants to purchase the Company’s common stock for $1.00 per share. The Company used the Monte Carlo Method to value the warrants, which used the following inputs: term of 7 years, risk free rate of 2.31%, no dividends, volatility of 71.4%, share price of $0.45 per share and a 50% probability of down-round financing. The Company determined that the fair value of the shares issued was approximately $900,000, or approximately $0.45 per share. The Company also entered into a registration rights agreement (“RRA”) with NNA, which the Company and NNA amended on February 6, 2015, which requires the Company to file a registration statement to register its shares with the SEC no later than June 26, 2015. The RRA requires the Company to use commercially reasonable best efforts to cause the RRA to be declared effective by the SEC. If the Initial Registration Statement is not filed with the SEC on or prior to the filing deadline, the Company must pay to NNA an amount in common stock based upon its then fair market value, as liquidated damages equal to 1.50% of the aggregate purchase price paid by NNA. Repurchase of Common Stock On October 23, 2014, the Company entered into a Settlement Agreement with Raouf Khalil (“Khalil”) whereby the Company reconveyed to Khalil all of the shares of Aligned Healthcare, Inc. (“AHI”) common stock that the Company acquired from Khalil under the Stock Purchase Agreement, dated as of February 15, 2011 (the “Purchase Agreement”). In addition, in consideration of a $10,000 cash payment, Khalil reconveyed to the Company 500,000 shares of the Company’s common stock, constituting all of the remaining shares that he still owned that were issued to him under the Purchase Agreement. Following these reconveyances, the Company no longer owns any of the outstanding shares of AHI’s capital stock, and neither Khalil nor any of the other Aligned Affiliates own any shares of the Company’s capital stock. Equity Incentive Plans The Company’s amended 2010 Equity Incentive Plan (the “2010 Plan”) allowed the Board to grant up to 12,000,000 shares of the Company’s common stock, and provided for awards including incentive stock options, non-qualified options, restricted common stock, and stock appreciation rights. As of December 31, 2014, there were no shares available for grant. On April 29, 2013 the Company’s Board of Directors approved the Company’s 2013 Equity Incentive Plan (the “2013 Plan”), pursuant to which 5,000,000 shares of the Company’s common stock were reserved for issuance thereunder. The Company received approval of the 2013 Plan from the Company’s stockholders on May 19, 2013. The Company issues new shares to satisfy stock option and warrant exercises under the 2013 Plan. As of December 31, 2014 there were approximately 1,600,000 shares available for future grants under the 2013 Plan. Stock options and restricted common stock issued to non-employees as compensation for services to be provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair value of the option or share, whichever can be more clearly determined. The Company recognizes this expense over the period in which the services are provided. Share Issuances A summary of the Company’s restricted stock sold to employees, directors and consultants with a right of repurchase of unlapsed or unvested shares is as follows for the nine months ended December 31, 2014:
|  |  |  | Weighted Average Remaining Vesting |  | Weighted Average Per Share |  | Weighted- average Per Share |
|  |  |  | Life |  | Intrinsic |  | Grant Date |
|  | Shares |  | (In years) |  | Value |  | Fair Value |
Unvested or unlapsed shares, beginning of period |  | 907,407 |  | 1.3 |  | $ | - |  | $ | 0.41 |
Granted |  | - |  | - |  |  | - |  |  | - |
Vested / lapsed |  | (716,667) |  | - |  |  | - |  |  | - |
Forfeited |  | - |  | - |  |  | - |  |  | - |
Unvested or unlapsed shares, end of period |  | 190,741 |  | 1.1 |  | $ | 0.09 |  | $ | 0.41 |
Options In July 2014, the Company issued 565,000 options to acquire the Company’s common stock to certain employees and consultants. The Company determined that the weighted average fair value of the options of $0.24 per share using the Black-Scholes method with the following weighted-average inputs: term of 6 years, risk free rate of 1.63%, no dividends, volatility of 63.7%, share price of $0.54 per share. In October 2014, in connection with services provided to the Company, the Company issued to various employees and consultants options to purchase an aggregate of 75,000 shares of common stock of the Company, which options have an exercise price of $1.00 and vest evenly and monthly over a three year period. The Company determined that the weighted average fair value of the options of $0.17 per share using the Black-Scholes method with the following weighted-average inputs: term of 6 years, risk free rate of 1.60%, no dividends, volatility of 62.9%, share price of $0.43 per share. On various dates in October, November and December 2014, in connection with services provided to the Company, the Company issued to a certain consultant options to purchase an aggregate of 15,000 shares of common stock of the Company, which options have an exercise price of $1.00 and vested upon grant. The Company determined that the weighted average fair value of the options of $0.15 per share using the Black-Scholes method with the following weighted-average inputs: term of 6 years, risk free rate of 1.60%, no dividends, volatility of 62.9%, share price of $0.39 per share. On November 18, 2014, in connection with services provided to the Company, the Company issued options to purchase 100,000 shares of common stock of the Company to an employee, which options have an exercise price of $1.00 and vest evenly and monthly over a one year period. The Company determined that the weighted average fair value of the options of $0.14 per share using the Black-Scholes method with the following weighted-average inputs: term of 6 years, risk free rate of 1.60%, no dividends, volatility of 62.9%, share price of $0.39 per share. On December 13, 2014, in connection with services provided to the Company, the Company issued to various physicians and consultants options to purchase 100,000 shares of common stock of the Company, which options have an exercise price of $1.00 and vest evenly and monthly over a three year period. The Company determined that the weighted average fair value of the options of $0.15 per share using the Black-Scholes method with the following weighted-average inputs: term of 6 years, risk free rate of 1.63%, no dividends, volatility of 62.9%, share price of $0.39 per share. Stock option activity for the nine months ended December 31, 2014 is summarized below:
|  | Shares |  | Weighted Average Per Share Exercise Price |  | Weighted Average Remaining Life (Years) |  | Weighted Average Per Share Intrinsic Value |
Balance, beginning of period |  | 6,287,000 |  | $ | 0.20 |  | 8.7 |  | $ | 0.11 |
Granted |  | 855,000 |  |  | 1.00 |  | - |  |  | - |
Cancelled |  | (100,000) |  |  | - |  | - |  |  | - |
Exercised |  | - |  |  | - |  | - |  |  | - |
Expired |  | - |  |  | - |  | - |  |  | - |
Forfeited |  | - |  |  | - |  | - |  |  | - |
Balance, end of period |  | 7,042,000 |  | $ | 0.26 |  | 8.2 |  | $ | 0.15 |
Vested and exercisable, end of period |  | 6,232,556 |  | $ | 0.22 |  | 7.3 |  | $ | 0.18 |
ApolloMed ACO 2012 Equity Incentive Plan On October 18, 2012 ApolloMed ACO’s Board of Directors adopted the ApolloMed Accountable Care Organization, Inc. 2012 Equity Incentive Plan (the “ACO Plan”) and reserved 9,000,000 shares of ApolloMed ACO’s common stock for issuance thereunder. The purpose of the ACO Plan is to encourage selected employees, directors, consultants and advisers to improve operations and increase the profitability of ApolloMed ACO and encourage selected employees, directors, consultants and advisers to accept or continue employment or association with ApolloMed ACO. The following table summarizes the restricted stock award in the ACO Plan during the nine months ended December 31, 2014:
|  | Shares |  | Weighted Average Remaining Vesting Life (Years) |  | Weighted Average Per Share Intrinsic Value |  | Weighted Average Per Share Fair Value |
Balance, beginning of period |  | 3,752,000 |  | 0.8 |  | $ | 0.02 |  | $ | 0.03 |
Granted |  | 184,000 |  | - |  |  | - |  |  | 0.77 |
Released |  | (183,996) |  | - |  |  | - |  |  | - |
Balance, end of period |  | 3,752,004 |  | 0.1 |  | $ | 0.70 |  | $ | 0.07 |
Vested and exercisable, end of period |  | 2,461,694 |  |  |  |  |  |  |  |  |
Awards of restricted stock under the ACO Plan vest (i) one-third on the date of grant; (ii) one-third on the first anniversary of the date of grant, if the grantee has remained in service continuously until that date; and (iii) one-third on the second anniversary of the date of grant if the grantee has remained in service continuously until that date. As of December 31, 2014, total unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Company’s 2010 and 2013 Equity Plans, and the ACO Plan’s and the weighted-average period of years expected to recognize those costs are as follows:
Common stock options |  | $ | 193,376 |
Restricted stock |  | $ | 139,400 |
ACO Plan restricted stock |  | $ | 48,846 |
Stock-based compensation expense related to common stock and common stock option awards is recognized over their respective vesting periods and was included in the accompanying condensed consolidated statement of operations as follows:
|  | Three Months Ended December 31, |  | Nine Months Ended December 31, |
|  | 2014 |  | 2013 |  | 2014 |  | 2013 |
Stock-based compensation expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | 1,227 |  | $ | 54,134 |  | $ | 12,148 |  | $ | 629,643 |
General and administrative |  |  | 155,325 |  |  | (76,338) |  |  | 1,120,062 |  |  | 1,469,165 |
|  | $ | 156,552 |  | $ | (22,204) |  | $ | 1,132,210 |  | $ | 2,098,808 |
Warrants Warrants consisted of the following for the nine months ended December 31, 2014:
|  | Weighted Average Per Share |  |  |
|  | Intrinsic |  | Number of |
|  | Value |  | warrants |
Outstanding, beginning of period |  | $ | 0.02 |  | 7,145,000 |
Granted |  |  | - |  | 2,000,000 |
Exercised |  |  | - |  | - |
Cancelled |  |  | - |  | - |
Outstanding, end of period |  | $ | - |  | 9,145,000 |
|  |  |  |  | Weighted |  |  |  |  |  |
|  |  |  |  | average |  |  |  | Weighted |
Exercise Price Per |  | Warrants |  | remaining |  | Warrants |  | average |
Share |  | outstanding |  | contractual life |  | exercisable |  | exercise price per share |
$ | 0.11485 |  | 1,250,000 |  | 1.6 |  | 1,250,000 |  | $ | 0.1149 |
$ | 0.11485 |  | 250,000 |  | 1.6 |  | 250,000 |  | $ | 0.1149 |
$ | 0.45000 |  | 500,000 |  | 1.6 |  | 500,000 |  | $ | 0.4500 |
$ | 0.50000 |  | 100,000 |  | 2.8 |  | 100,000 |  | $ | 0.5000 |
$ | 0.45000 |  | 825,000 |  | 3.1 |  | 825,000 |  | $ | 0.4500 |
$ | 0.40000 |  | 220,000 |  | 3.1 |  | 220,000 |  | $ | 0.4000 |
$ | 1.00000 |  | 2,000,000 |  | 6.2 |  | - |  | $ | 1.0000 |
$ | 2.00000 |  | 2,000,000 |  | 6.2 |  | - |  | $ | 2.0000 |
$ | 1.00000 |  | 1,000,000 |  | 6.2 |  | - |  | $ | 1.0000 |
$ | 1.00000 |  | 1,000,000 |  | 3.6 |  | 1,000,000 |  | $ | 1.0000 |
|  |  | 9,145,000 |  | 4.5 |  | 4,145,000 |  |  | 0.4600 |
In connection with the 2014 NNA financing, NNA received warrants to purchase up to 2,000,000 shares of the Company’s common stock at an exercise price of $1.00 per share and up to 2,000,000 shares at an exercise price of $2.00 per share, subject to adjustment for stock splits, reverse stock splits and stock dividends, and which are exercisable at any date prior to March 28, 2021. The warrants also contained down-round protection under which the exercise price of the warrants is subject to adjustment in the event the Company issues future common shares at a price below $0.90 per share. The Company determined that the warrants should be classified as liabilities under ASC 815-40, which requires the Company to determine the fair value of the warrants at the transaction date and at each subsequent reporting date (see Notes 2 and 6). Following the funding of the Convertible Note on July 30, 2014, additional warrants to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $1.00 per share that had been issued in connection with the 2014 NNA financing became exercisable (see Note 6). Authorized stock At December 31, 2014 the Company was authorized to issue up to 100,000,000 shares of common stock. The Company is required to reserve and keep available out of the authorized but unissued shares of common stock such number of shares sufficient to effect the conversion of all outstanding shares of the 9% Senior Subordinated Callable Notes, the exercise of all outstanding warrants exercisable into shares of common stock, and shares granted and available for grant under the Company’s 2013 Plan. The amount of shares of common stock reserved for these purposes is as follows at December 31, 2014:
Common stock issued and outstanding |  | 48,634,549 |
Conversion of 9% Notes |  | 2,750,000 |
Conversion of 8% Notes |  | 2,000,000 |
Warrants outstanding |  | 9,145,000 |
Stock options outstanding |  | 7,042,000 |
Remaining shares issuable under 2013 Equity Incentive Plan |  | 1,600,000 |
|  | 71,171,549 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph d -Article 4 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 + Details
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